Retailers made a last ditch effort to salvage a lackluster final holiday week with "after Christmas" level pricing, but undoubtedly many shoppers have held out until after the holiday for even deeper discounts. For many consumers in recent seasons, belated Christmas gifting and gift cards have been part of the quest to land the lowest price imaginable. But with stores this year chopping upwards of 60 percent off list during the final days before Christmas, will post-Christmas clearance sales be as dramatic?
The research firm, Retail Metrics, came out on Tuesday morning with an overall projection of 2.8 percent growth for December revenue in stores open at least a year, up a bit from 2.6 percent in 2012. Retail Metrics president Ken Perkins said the final weekend before Christmas "did not generate the final crush of shoppers necessary to save the holiday season," according to NBC News.
On Tuesday, Amazon.com was already posting "after Christmas" deals of as much as 70 percent off apparel and 60 percent off some electronics, according to AP. And Old Navy was applying 75 percent-off discounts, saying its "after-holiday sale starts early."
The tendency to wait for last minute deals seems to say more about the American competitive spirit than the need to economize. No amount of discounting appears to be enough.
In a survey by America's Research group, nearly a quarter of last-minute shoppers said they were holding out for 60 percent or 70 percent off discounts. "When you ask consumers why they didn't get finished, the number one reason was they were waiting for bigger discounts," Britt Beemer, chairman and founder of the research firm, told NBC.
Consumers apparently see heavy discounting as an entitlement — just rewards for the efforts they put into shopping. "I just waited until this weekend to [pay] what I thought was fair," said Andrea Vollf, an interior designer from Schaumburg, Ill. in the NBC report. "Stores pretty much overprice everything to cover their overhead."
Clearly, deeper holiday discounting should join death and taxes on Ben Franklin's list of life's certainties.
"I've lived through a lot of holiday seasons and you can predict that 2014 will be more promotional than 2013 — if that's possible," said J. Crew Chairman and CEO Mickey Drexler in a CNBC interview last week. "I think it's a very long term, slow race to the bottom."
Mr. Drexler went on to advise retailers that the only way to break the cycle is to be more creative and inventive. On the day before Christmas, J. Crew was e-mailing offers of 30 percent off online and in-store goods. One could argue that, in this environment, J. Crew's offers are daringly conservative.
What are the chances that in coming years we'll see a reversal of the trend toward deeper and deeper holiday price cutting?